Sept. 20 (Bloomberg) -- Energy rigs in the U.S. fell by
seven to 1,761 this week as natural gas rigs decreased for the
first time in three weeks, according to Baker Hughes Inc.

Gas equipment dropped by 15 to 386, the Houston-based field
services company said today on its website. Oil rigs jumped by
eight to 1,369. The miscellaneous count was unchanged at six.

The oil total has increased as domestic crude output
climbed to the most since 1989, with producers using hydraulic
fracturing and horizontal drilling to reach shale deposits. The
resurgence helped the U.S. meet 87 percent of its energy needs
in the first five months of 2013, on pace to be the highest
annual rate since 1986.

“Higher oil rigs fit with higher oil prices and lower gas
rigs with still relatively low gas prices,” said James
Williams, a drilling consultant and president of WTRG Economics
in London, Arkansas.

U.S. crude has increased 14 percent in the past year and on
Sept. 6 reached $110.53 a barrel, its highest close since May
2011. Natural gas is down 16 percent from the year’s high on
April 19, and is 7.3 percent below its five-year average price.

U.S. oil output rose to 7.83 million barrels a day last
week, the U.S. Energy Information Administration said Sept. 18.
Production has increased 12 percent so far this year after a 19
percent gain in 2012.

Vertical Equipment

The verticals rigs declined by 23 to 421, while horizontal
rigs increased by 15 to 1,091 and directional rigs added one to
249, according to Baker Hughes.

“Many of the horizontal oil wells will pay back the cost
of drilling in the first year,” compared with a longer time
frame for vertical wells, Williams said in a phone interview.
“In a sense it’s a short-term decision. If the prices are high
today, the chances of prices changing enough to make drilling
uneconomic in the first 12 months is a whole lot lower than with
a vertical well.”